EUR/GBP plunges to 0.8500 neighborhood

Having posted a daily high near 0.8580 level, the EUR/GBP cross extended its near-term corrective move for third consecutive day and has now dropped to a fresh 11-day low, heading inching closer to 0.8500 psychological mark.

Today's German GDP print for Q2 2016 clearly pointed to signs of a possible economic slowdown in the Euro-zone's largest economy, which is weighing heavily on the shared currency across the board. 

How strong has the move been?

The hourly FXStreet OB/OS Index is showing oversold conditions, alongside the FXStreet Trend Index which is slightly bearish. At the time of writing, RSI is neutral at 29.46, up from 19.26 at the last hour close, while ADX is trending at 64.90, up from 29.90 previous.

Meanwhile, daily RSI is in neutral territory at 55.58. On the hourly EUR/GBP chart, the 200 SMA is declining and currently at 0.8594, down from the previous hour close at 0.8633. On average, the exponential closing price for the past 20 days is 0.8547, with the trend indicating a continuation higher ahead.

How volatile has EUR/GBP been?

2-Standard Deviation Volatility Bandwidth is presently at 62 pips and expanding on the hourly EUR/GBP chart, while the ATR (14) is currently at 18 pips. 2-Standard Deviation Volatility Bandwidth is at 404 pips and shrinking on a daily chart.

Over the last four weeks, the average movement for the present session has been 18 pips per hour. Further, today’s peak period for volatility was between 8:00-9:00 GMT, which saw an average movement of 31 pips over the previous four week period.

Price levels to be considered

Current price is 0.8510, with resistance ahead at 0.8518 (Daily Classic S2), 0.8521 (Weekly Classic S2), 0.8542 (Daily Classic S1), 0.8547 (Daily 20 SMA) and 0.8563 (Yesterday's Low). Next support to the downside can be found at 0.8508 (Daily Low), 0.8473 (Daily Classic S3), 0.8453 (Weekly Classic S3), 0.8363 (Monthly Low) and 0.8100 (Daily 100 SMA).